Lend Lease (US) Construction Inc., Plaintiff-Appellant,
September 16, 2016
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. l:15-cv-04318 -
Samuel Der-Yeghiayan, Judge.
Posner, Ripple, and Rovner, Circuit Judges.
POSNER, Circuit Judge.
2014, Lend Lease construction company, the construction
manager of the River Point Tower Project-a project to build
an ultramodern office building in downtown Chicago-hired
Cives Corporation to be a subcontractor on the project. Cives
in turn hired Midwest Steel, Inc., to be a sub-subcontractor.
Midwest had, years before, hired Administrative Employer
Services, Inc. (AES) to supply Midwest with additional
workers, who would be co-employed by Midwest and AES. These
workers would work on the River Point Project.
order to provide workers' compensation insurance to all
the workers on the project, Lend Lease entered into what is
called a "contractor controlled insurance program"
with an insurance company named Starr Liability &
Indemnity Co. The Starr policy provided for a $500, 000
deductible; that is, Lend Lease would have to pay the first
$500, 000 of any claims, covered by the policy, of injured
workers. All subcontractors were supposed to join in the
policy; Lend Lease alleges that Midwest enrolled and
therefore its workers were covered. Lend Lease also alleges
that AES had several years earlier obtained workers'
compensation for its workers from Technology Insurance Co.
(referred to by the parties as "TIC"), which meant
that injured AES-Midwest workers could obtain workers'
compensation from either Starr (or Lend Lease if it
hadn't used up its deductible) or TIC.
in 2014, four ironworkers, jointly employed by Midwest and
AES and performing work for Midwest (and thus indirectly for
Lend Lease, as the overall contract manger) were injured on
the job and sought workers' compensation. Starr accepted
coverage but under a reservation of rights, because of the
$500, 000 deductible. The workers' claims ultimately
exceeded $500, 000 (though by how much we haven't been
told), so Lend Lease has had to pay its full deductible and
Starr has paid the remaining claims.
with Midwest and AES having acknowledged that they were the
co-employers of the injured workers, Lend Lease filed a
diversity suit against TIC, AES's insurer, and AES as
well, seeking reimbursement of the $500, 000 in workers'
compensation benefits that Lend Lease had paid to the four
workers. The district court dismissed the suit, however,
precipitating this appeal to us by Lend Lease.
Lease alleges that the four injured workers were insured both
by Starr and by TIC, and if this is right there would be an
argument for splitting the workers' compensation benefits
between the two insurers-and indeed we learned at oral
argument that Starr has filed its own lawsuit against AES and
TIC. See Home Insurance Co. v. Cincinnati Insurance
Co., 821 N.E.2d 269, 316 (111. 2004) ("Contribution
as it pertains to insurance law is an equitable principle
arising among coinsurers ... and is only available
where the concurrent policies insure the same entities, the
same interests, and the same risks.") (emphasis added).
But that's not this case; and in this case Lend Lease is
not asking for a split between coinsurers-what good would
that do it? Instead it argues that because it is a
policyholder that paid a deductible in conformity to the
Starr policy, it is entitled to contribution, or in the
alternative to indemnification, from TIC, in the amount of
$500, 000, which would erase Lend Lease's deductible. Had
it not been for the deductible, Starr would have had to pay
the entire workers' compensation benefits due the injured
employees, so it saved money-but so did Lend Lease, though
probably less than the deductible. For the deductible, by
reducing Starr's risk, doubtless had reduced the
insurance premiums charged Lend Lease by Starr, by reducing
Starr's potential liability to workers injured while
employed on Lend Lease's construction project. Anyway,
Lend Lease made a deal with Starr and is bound by it.
Lease also asks for a declaratory judgment that TIC is
obligated to pay the workers' compensation benefits for
the four injured workers, as well as the benefits for any
future AES-Midwest workers who are injured on the project.
Since we've rejected its claim for contribution or
indemnification from TIC, there is no ground for the
declaratory judgment that it seeks.
Lease makes a separate and distinct argument that AES has
been unjustly enriched because it "has paid less premium
for its workers compensation insurance policy (i.e., the TIC
Policy), it has not had to satisfy any applicable deductible
or self-insured retention on the TIC Policy, and/or it has
not had the claims of the Injured Workers counted against its
insurance loss runs [reports that document claims
activity]." But AES was not obligated to purchase an
insurance policy that would get Lend Lease out of paying its
Lend Lease appeals the denial of its motion under Federal
Rule of Civil Procedure 59(e) asking the district judge to
change judgment from dismissal with prejudice to dismissal
without prejudice in order to allow Lend Lease to file a
fourth complaint that would add Starr as a plaintiff and
Midwest as a defendant, and assert new claims against AES.
But Lend Lease has already had three chances to plead